Alcohol consumption drops sharply across New Zealand as venues call for tax relief

Friday, 27 February 2026

Hospitality NZ is pleading again for a reduction in excise duty on beer, after official figures showed Kiwis’ alcohol consumption plunged last year.

Stats NZ reported that the volume of alcoholic drinks sold and available for sale last year fell 8.3%, from the year prior, to 442 million litres.

Beer volumes were down 10%, wine down 11%, and while spirits bucked the trend with a 1.3% uplift, the volume of “pure alcohol” sold and available fell 7.3%.

Hospitality NZ chief executive Kristy Phillips said reduced alcohol consumption had contributed to the “well-documented” challenges her sector had faced over the past few years.

Venues had responded to changes in customer demand, for example by making more alcohol-free beverages available.

But she said Hospitality NZ wanted to see venues receive more support, and called for “a reduction in excise tax on kegs”.

“It would be a clear indicator of support for the sector and would go some way to helping bars and restaurants to operate sustainably going forward,” she said.

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Stats NZ’s figures suggest people’s average consumption of alcohol has been edging down for some time, with volumes slipping from 2.16 standard drinks per adult per day in 2011, to 1.96 drinks in 2022.

But the decline has rapidly picked up pace over the past three years, further accelerating last year, when the average fell to 1.63 standard drinks per adult per day.

Dylan Firth, executive director of the Brewers Association, attributed the decline to a variety of factors, including a more general drop in discretionary spending.

But there had been a shift towards people consuming lower-alcohol beverages and younger people, in particular, “just drinking less”, he said.

“We’ve seen the rise of that kind of technological generation, who don't necessarily want to go to a party and get silly, because they are thinking about the consequences of someone recording them.

“The idea of what is a social occasion is, is different.”

Firth noted a few breweries had closed and the industry had consolidated from “the highs of the peak craft-beer boom”.

“One of the hard things is excise tax, because it just keeps going up when people are drinking less,” he said.“That margin has just been taken straight out of the pockets of the producers, hospitality businesses and consumers ultimately. That’s where the struggle is; you’re getting hit when you’re down.”

The change in consumption patterns had an upside, he acknowledged.

“One of the interesting shifts is that, while we see the consumption volumes going down, harmful consumption is dropping even faster. When people are drinking they’re drinking better.

“There are still people drinking beer. It’s still the most popular adult beverage in the market, and I think there’s still space for innovation. There's just a bit of consolidation over the last few years,” he added.

Nicola Waldren, general manager of the Restaurant Association, said the changes in consumer behaviour had been showing through in some of its own research.

Diners were increasingly demanding low or no-alcohol options or “opting for a glass of wine, where maybe they shared a bottle with their partner before”, she said.

“Both cautious spending and generational trends are certainly playing a part. We hear a lot about ‘Gen Z’. They are still very keen to dine out, but the way they consume alcohol is quite different. They’re not rejecting it, but they're being very considered about where they consume it.”

Restaurateurs were responding by offering a wider range of more premium alcohol-free drinks, Waldren said.

But having a liquor licence was costly, she said. “Those cost pressures come at a time when consumers are really price-sensitive. I know that a lot of restaurant operators feel that they are really caught in the middle.”

Rose Crossin, a lecturer in public health at the University of Otago, noted the Health Ministry data indicated the proportion of people eschewing alcohol altogether rose only slightly last year.

But that data indicated the proportion of people engaged in “hazardous drinking” fell from 21.3% in the year ending June 2020, to 16.6% in the year to June last year.

The Health Ministry defined “hazardous drinking” as people responding to a survey on their drinking habits in such a way as to suggest at least some “simple advice” from a clinician might be warranted.

As such, the figures do not indicate that anything like that high a proportion of people might be struggling with addiction or drinking-related violent behaviour.

Nevertheless, Crossin said it was important to note that hazardous drinking remained “a significant public health problem”.

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